Back to blog
Office Freedom
Office Freedom
  • 2 Minute Read
  • 21st February 2008

Serviced office space V Conventional offices?

fully-furnished-office.jpg empty-office.jpg

Flexibility is key - One of the most important decisions to make for a business is to decide on the most suitable office space to rent.Renting office space is definitely a major part of any company’s budget and has to

be a cost-effective solution. Nowadays flexible office space is critical, especially important when a business is expanding or down-sizing and serviced offices are an ideal solution and also surprisingly cost effective.

Compare Apples with Apples not Pears - it is not applicable to compare serviced office inclusive pricing with conventional office exclusive £rent per square foot because Conventional office space rental is quoted on £per square foot basis, exclusive of rates, service charges, cleaning etc Serviced office space pricing is quoted fully inclusive so to make an apples with apples comparison one must compare total annual occupancy costs not the price per square foot.

Plug and Play, Fully Inclusive - Business centre accommodation is prewired, prebuilt and fully equipped – i.e. not requiring capital expenditure. Also the monthly rental is inclusive so unlike a traditional office where you have to spend time and money on IT, Telecoms, cleaning services and managing all other aspects of leasing a property, in a business center this is all included. "Pay-as-you-go" services are also available such as secretarial services, use of photocopier and meeting rooms (you often receive a number of hours free per month) which means you may not need to employ as many people as you think.

Pay for what you use - In a serviced office you only pay for the space you actually occupy, space for corridors, reception areas, IT rooms, break out/internet areas, kitchen space, comfort rooms is NOT charged for. However in a conventional leasehold office you pay rent , rates and service charge on the whole space whether you use it or not. Also you only pay for occasionally used space such as meeting rooms as and when you use them as opposed to paying rent, rates and service charge on this space the whole year round.

How does this benefit the tenant? This means that in a business centre you need a lot less space than in a conventional office, approx 50% less e.g. if you think you need 1000 square foot to accommodate say 3 individual offices, an open plan area for 2 people, meeting room, reception area, toilets, kitchen, IT room, you can easily accommodate 5 people in a serviced office in say 400 square foot. So what does this mean? It means that your annual budget for an office can stretch a lot further if you only need half the space you think you do.

Amazingly, as per MWB Exchange, Serviced Office space cost on average 60% less than conventional offices. The cost breakdown shown by MWB demonstrates clearly the difference:

'The True Cost of the Flexible Office' - , published by the Chartered Institute of Purchasing and Supply (CIPS) in 2001, identified an average saving of 78% by using a fully serviced business centre office.

'The Total Office Cost Survey', - published by Actium Consult and Cushman & Wakefield in 2004, found the average cost of rent and rates is only 49% of total office costs.

So how much space per person is needed in a serviced office? Business centres usually allow an average of 70sq Ft per person, and can vary from 55sq ft to 100 sq Ft, per person.